Zuora Q4 2023 Earnings Report
Key Takeaways
Zuora reported solid Q4 2023 results, exceeding guidance in revenue, free cash flow, net dollar retention, and non-GAAP operating income. Total revenue increased by 14% year-over-year, with subscription revenue up by 16%. The company continues to execute its land and expand strategy, focusing on billing, revenue, and subscription management solutions.
Total revenue was $103.0 million, up 14% year-over-year.
Subscription revenue reached $89.5 million, a 16% increase year-over-year.
GAAP loss from operations improved to $23.7 million compared to $34.2 million in Q4 2022.
Free cash flow was negative $20.1 million, compared to $7.6 million in the fourth quarter of fiscal 2022.
Zuora
Zuora
Zuora Revenue by Segment
Forward Guidance
Zuora provided guidance for Q1 and full fiscal year 2024, anticipating subscription revenue between $88.0M - $89.5M for Q1 and $374.0M - $384.0M for the full year. Total revenue is expected to be $101.0M - $103.0M for Q1 and $428.0M - $440.0M for the full year.
Positive Outlook
- Subscription revenue for Q1 is projected to be $88.0M - $89.5M.
- Total revenue for Q1 is expected to be $101.0M - $103.0M.
- Non-GAAP income from operations for Q1 is guided at $4.0M - $5.0M.
- ARR growth is anticipated to be 12% - 15%.
- Dollar-based Retention Rate is expected to be 107% - 109%.
Challenges Ahead
- Guidance is subject to various important cautionary factors.
- Tax-related and acquisition-related expenses associated with the acquisition of Zephr Inc Limited (Zephr) are expected to impact free cash flow.
- Costs associated with the workforce reduction approved in November 2022 will affect free cash flow.
- Lower billings related to the macroeconomic environment including extended deal cycles are anticipated.
- Stock-based compensation expense cannot be reasonably calculated or predicted at this time, making reconciliation of non-GAAP income from operations to GAAP loss from operations difficult.